Update: According to MarketWatch the bill that would have extended the closing deadline is currently stalled but may not be dead yet as the Senate explores other options.
The Senate has approved an extension to the closing deadline for homebuyers seeking to claim the tax credit. The extension would allow an estimated backlog of 180,000 first time buyers sufficient time to close on their transactions. See the following article from HousingWire for more on this.
Senators passed an amendment to the proposed American Jobs and Closing Tax Loopholes Act of 2010 that aims to give an estimated 180,000 prospective first-time homebuyers enough time to close on a purchase and qualify for federal tax incentives.
The bill — House Resolution 4213 — passed the House vote in December and moved through the Senate Committee on Finance in March. The amendment, sponsored by Sen Harry Reid (D-NV), that passed yesterday extends the homebuyer tax credit by three more months.
“The first-time homebuyer tax credit was an extremely popular and successful program that has helped Americans purchase homes and given a boost our economy,” Reid said in a statement. “Because of this program’s popularity and the time it takes to complete transactions such as short sales, I led the effort today to extend the closing deadline for this tax credit through September of this year — allowing lenders more time to clear a backlog of 180,000 potential homebuyers nationwide.”
Under the tax credit’s current deadline, qualifying purchases that were under contract by April 30 must close by June 30. Under the Reid’s amendment, that closing deadline would be pushed to Sept. 30, 2010 in an effort to ensure the qualifying sales can close.
Reid is joined in his effort by amendment co-sponsors Sen Christopher Dodd (D-CT) and Sen Robert Mendendez (D-NJ).
Senators voted on Wednesday 60-37 in favor of the Reid amendment. At the same time, they voted against a similar amendment by Sen Johnny Isakson (R-GA) that would also have extended the closing deadline for the first-time homebuyer tax credit.
According to a spokesperson with Isakson’s office, the only difference between the amendments involved the method of paying for the tax credit extension. Isakson’s amendment opted for unused stimulus funds from the $787bn Recovery Act passed in 2009. Reid’s amendment, the spokesperson said, would have paid for the tax credit extension through eliminating the tax deductability of punitive damages.
A spokesperson for Reid’s office did not return requests for comment.
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